With the market conditions tougher than ever, it’s all the more important to choose the right estate agent.
Estate agents are a much-maligned breed, but what is usually forgotten is that they get messed around by the general public far more frequently than they intentionally behave badly. For every negative story that one hears, there are twice as many excellent examples of agents, and my job would be twice as hard if it wasn’t for the skill and professionalism of many of the agents that my team and I deal with. Here are few general guidelines of the business that all buyers and sellers should be aware of. Since 1998, members of the industry associations have had a code of practice under the ombudsman scheme, but the main legislation governing estate agency is the Estate Agents Act 1979, which sets out how they are supposed to behave and is enforced by the Office of Fair Trading.
This legislation states, for instance, that estate agents aren’t allowed to make up offers on a property to encourage a higher price, and they can’t discriminate against somebody who wants to buy but doesn’t want to get a mortgage through them. Choosing the right agent to sell your property is the key to a smooth transaction. You need to be careful what you sign, and totally clear about the selling arrangement into which you are entering. There are three types of agency contract. Sole selling means you have a contract with one agent and commission is unavoidable if the property is sold; sole agency means you have a contract with one agent, but would be able to sell privately without incurring a fee. With a multi-agency arrangement, you have contracts with several agents.
I would never recommend signing a contract when a ‘ready, willing and able purchaser’ results in a fee. If your situation changes and you decide not to proceed, you could end up with a bill regardless. Also, avoid tie-in periods of eight weeks or more. There is considerable expense behind successfully marketing a property, and so it’s reasonable for the agent to have a tie-in period during which you can’t go to the competition, but it shouldn’t be overly restrictive.
Finally, agency fees should be paid on completion, not on exchange. If a contract is confusing about any of these details, don’t sign it go to a different agent. But it’s not just sellers that have to keep their wits about them. What many buyers fail to understand is that estate agents are paid to look after the seller and to secure the highest price; they aren’t paid to advise or guide purchasers. In the harsh light of commercial reality, they’re unlikely to care who buys a property as long as they get their fee.
Buyers should also be aware that good agents are excellent relationship builders, because the more they know about you, your property requirements and your finances, the easier it is to sell you a house. You need the agents on-side as much as possible to get early information on the best properties but do be careful how much you let slip. Remember that they are trained to win your trust and may try to override your point of view or nudge you into spending more than you wanted.
Some agents have viewing targets to meet, and will want to show you as many properties as possible. If you read the sales particulars and ask questions before agreeing to a viewing, you should avoid wasting time looking at something totally unsuitable. More than 70% of buyers spend 20% more than they set out to this is why agents take you to places you can’t afford, hoping you’ll fall in love with one and throw caution to the wind.
By law, sellers and agents don’t have to point out defects or problems, but they must answer direct questions accurately. If a buyer has been given and relied on false information, they may have a claim under the Property Misdescriptions Act 1991. Whether buying or selling any verbal understanding with the agent that is relevant to the process whether it relates to fees, price, timescale, chain situation, existence of another bid or exclusive period should be confirmed in writing. If you’ve laid a paper trail of what’s been agreed, there’s no room for misunderstanding. Whether you’re buying or selling, deal only with agents who belong to the ombudsman scheme or to a professional association.
